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International Journal of Health Economics and Management

Published in:

01-12-2014

Does a global budget superimposed on fee-for-service payments mitigate hospitals’ medical claims in Taiwan?

Author: Pi-Fem Hsu

Published in: International Journal of Health Economics and Management | Issue 4/2014

Abstract

Taiwan’s global budgeting for hospital health care, in comparison to other countries, assigns a regional budget cap for hospitals’ medical benefits claimed on the basis of fee-for-service (FFS) payments. This study uses a stays-hospitals-years database comprising acute myocardial infarction inpatients to examine whether the reimbursement policy mitigates the medical benefits claimed to a third-payer party during 2000–2008. The estimated results of a nested random-effects model showed that hospitals attempted to increase their medical benefit claims under the influence of initial implementation of global budgeting. The magnitudes of hospitals’ responses to global budgeting were significantly attributed to hospital ownership, accreditation status, and market competitiveness of a region. The results imply that the regional budget cap superimposed on FFS payments provides only blunt incentive to the hospitals to cooperate to contain medical resource utilization, unless a monitoring mechanism attached with the payment system.

The global budgeting has not changed the payment basis for every individual hospital; hence the claimed numbers of points for all service items listed on the BNHI payment scheme are fixed. Since the “relative prices” for all service items are still unchanged, the global budgeting creates no incentive for healthcare providers by increasing one type of procedure instead of decreasing the other one under the mechanism. Due to this reason, the study could choose a single disease to identify policy effect.

Medical centers and metropolitan hospitals are both large teaching hospitals. Taiwan’s BNHI stipulates that only large teaching hospital can carry out percutaneous coronary angioplasty (PTCA) or coronary artery bypass grafting (CABG) procedures; therefore, the majority of AMI inpatients are admitted to these two levels of hospitals.

The high-competition markets include the Taipei and Central divisions; the middle-competition markets include the Southern and Kaoping divisions; and the low-competition markets include the Northern and Eastern divisions.

AMI is listed as Charlson index = 1; Charlson index of all AMI inpatients are labeled as at least “1”.

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Title: Does a global budget superimposed on fee-for-service payments mitigate hospitals’ medical claims in Taiwan?
Author: Pi-Fem Hsu
Publication date: 01-12-2014
Publisher: Springer US
Published in: International Journal of Health Economics and Management / Issue 4/2014
Print ISSN: 2199-9023
Electronic ISSN: 2199-9031
DOI: https://doi.org/10.1007/s10754-014-9149-6

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